Osterman Research Blog


The Real Importance of Google Drive
April 25, 2012, 10:12 pm
Filed under: Uncategorized

Google has finally announced Drive, its storage and synchronization solution that – at least on one level – is designed to compete with Dropbox, Microsoft SkyDrive, YouSendIt, Trend Micro SafeSync, SugarSync, GoodSync, Syncplicity and other file-synchronization tools.  On an overly simplistic level, file synchronization is a superset of online backup, often focused on individual users, because of its addition of automatic synchronization features – and it’s one of the hottest areas of growth in the storage space right now.  Secure file transfer – another growing area of interest and investment – is a related market, but somewhat different because of its emphasis on the transfer of content as opposed to its storage.

Drive now creates a new front in the ongoing, multi-front battle between Google and Microsoft in the context of communications (Gmail vs. Exchange Online), online productivity applications (Apps vs. Office Web Apps), search (Search vs. Bing), real-time communications (Talk vs. Lync), etc.  However, Drive may represent the biggest headache for Microsoft in a couple of ways.  First, by integrating so tightly with Gmail and Google Docs, Drive creates even more of an ecosystem in the cloud, allowing organizations to create and store everything online.  Drive does not represent a dramatic shift toward making it easier to migrate to the cloud, but is another – albeit important – push in that direction.  To underscore this, Google is making cloud storage very inexpensive and focusing on both individuals and corporate customers.  For example, Drive offers 16 terabytes of storage for $800 per month, or five cents per gigabyte per month.  This is dramatically lower than Amazon’s S3 pricing of 11 cents per gigabyte per month at that storage level – even at 5,000 terabytes of storage per month, Amazon’s pricing is 5.5 cents per month.  Yes, different markets for Drive and S3, but an interesting pricing comparison nonetheless.

Second, and perhaps more importantly, the growing ecosystem of cloud capabilities offered by Google and even Microsoft itself, as well as the addition of very inexpensive storage in Drive, will be yet one more thing that deemphasizes the importance of the OS in the minds of many corporate decision makers.  As has been discussed by many others, the rise of the browser’s importance is more or less coincident with the fall of the OS’ relevance.  That’s not to say that the choice of operating system is not an important one, but justifying an expensive migration from Windows 7 to Windows 8 (or even Lion to Mountain Lion) will become more difficult in an age where applications and communications tools are accessed increasingly using a cloud model.

What Drive represents, then, is much more important than just another Dropbox competitor, but rather another arrow in the Google quiver directed against Microsoft.  Microsoft has already taken some preemptive steps as a result, lowering the price of Office 365 last month and increasing the amount of free storage on SkyDrive just this week.

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